Matthew Dow
Small-cap, value, long only, growth at reasonable price

Qualstar: A Beaten Down Company With 50% Upside Potential

Qualstar (NASDAQ:QBAK) is a small publicly traded company with a market capitalization of only $16m. The company is a niche player in the automated tape storage solutions market, and has survived rapid technological advances since 1984. About 10 years ago the company also bought a power supply business in an effort to diversify. Recent overall results have been poor to say the least, as operating cash flow has been sharply negative. The troubles have been particularly pronounced in the tape storage side of the business.

The good news it that all is not lost at Qualstar, and everything could be about to change for the better. A recent hostile takeover in July by an activist capital management firm...

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